Impact of Medicaid Reimbursement Rates on Pediatric Dental Utilization

Abstract: Objectives: Low-income children in Medicaid utilize dental services at lower rates than do commercially insured children, thereby exacerbating underlying oral health disparities. This study examines the impact of provider payments on pediatric dental Medicaid utilization to determine whether fee increases hold potential to reduce access disparities. Methods: We developed a state-level database for years 1999 through 2006 of (1) dental utilization levels for Medicaid-enrolled children as reported by CMS; and (2) Medicaid payment levels to dentists for a weighted set of common pediatric dental services using state fee schedules and proprietary data on dentists' commercial fees. Employing fixed effects models, we examined the relationship between utilization and Medicaid payment across states and years. Results: Between 1999 and 2006, children's dental utilization nationally increased from 25% to 33% while average payment rates varied randomly across years between 60% and 71%. An initial model, using a continuous payment variable and state indicator variables, showed a negative association between payment and utilization (coef= -0.09, p<0.01) and explained 55% of utilization variance across states. By adding year as a factor variable, payment became positively but not significantly associated with utilization while time became significant (coef=0.03, p<0.01) and the model explained 68% of total variance. The final model, which replaced the continuous payment variable with seven discrete payment levels to assess a threshold effect, explained 69% of total variance and showed that payment levels above 60% are significantly associated with increased utilization compared to payment levels below 40% (coef=0.04, p<0.05). This upward trend peaks with payment levels between 70% and 80%, but flattens thereafter. Conclusions: Dental utilization by child Medicaid beneficiaries is positively associated with payment rates to dentists when payment rates exceed 60% of dentists' commercial charges. Medicaid fee increases hold potential to increase utilization by low-income children and reduce dental access disparities.